How do we get them to stop bribing politicians who thus refuse to implement GHG-fees?

Give them money!

Yes, it sounds crazy, but here's how to make it work:

All (domestic) emissions of GHGs attract a fee of F$.

Divide R(evenue) = Q(antity) * F(ee) into two buckets, in proportion to p(percent)

One bucket is distributed to citizens evenly.

The other bucket is distributed to GHG-producers in proportion to their share of average, 2012-14 GHG emissions.

Politicians will have to find the right p that keeps citizens and GHG-emitters happy, but that share does not matter, as emitters will have an incentive to emit less while collecting the same share of revenues according to the 2012-14 baseline.

Bottom Line: A direct bribe to help the public is better than hidden brides that harm everyone.

3 comments:

Anonymous
said...

"emitters will have an incentive to emit less while collecting the same share of revenues according to the 2012-14 baseline."

Not following this last bit, David. Nor am I understanding why - if it works for corporate emitters - you wouldn't do the same for individuals, albeit implying that you would be giving the largest share of GHG-fee revenue to those with the biggest GHG-footprint lifestyles, which seems perverse on the face of it.

thanks for sharing your idea on one of the most important issues arising in the after-math of 2015's world climate summit in Paris. The world may have agreed on jointly going for the 2°C target, even aiming at 1.5°C. But we really need to find entry points into stringent climate policies. National public finance is key to do so.

I've published a paper on this issue, seen from the perspective of finance ministers in an international setting: Due to international tax competition, governments are under pressure to reduce corporate taxes. Our model illustrates that if they combine a carbon tax ("GHG-fee") with appropriate reductions in corporate taxes ("bribes"), national welfare increases.

You can find the peer-reviewed paper here:http://link.springer.com/article/10.1007/s10640-015-9982-1

In case you cannot access it, you can read the freely available Harvard working paper version:http://belfercenter.hks.harvard.edu/publication/25110/why_finance_ministers_favor_carbon_taxes_even_if_they_do_not_take_climate_change_into_account.html